Swedish Intelligence: Russian Economy on the Brink of Deepest Crisis. Unclear if Putin is Told About It

A car with a mock-up of a missile, with the inscription "To Washington". Saint Petersburg, March 8, 2026. Photo AP Photo / Dmitri Lovetsky

Russia is likely systematically overstating key economic indicators to create an impression of resilience against sanctions and military spending. This was stated by the head of Sweden's military intelligence, Thomas Nilsson, in an interview with the Financial Times.

According to Swedish estimates, the real level of inflation in Russia is significantly higher than the official one. While the Central Bank of the Russian Federation reports 5.86%, it could actually be closer to the current size of the Bank of Russia's refinancing rate — around 15%.

Additionally, Stockholm agrees with the conclusions of German intelligence BND: Moscow is likely understating its budget deficit — by approximately 30 billion dollars. Earlier, Germany stated that in 2025, the real deficit already exceeded official figures by more than 2.3 trillion Russian rubles.

Swedish intelligence also points to a number of financial signals that may indicate the risk of a future banking crisis in Russia.

Nilsson does not rule out that Russian leader Vladimir Putin may not have the full picture: "Even with the distorted information he receives, it's impossible to endlessly escape reality."

According to him, the Russian economy remains vulnerable despite rising oil prices during conflicts in the Middle East. To simply cover the budget deficit, Russia needs Urals oil to stay above $100 per barrel for a year. For deeper problems — much longer.

It is separately noted that a growth model based on military production cannot be sustainable. "These are weapons that are ultimately destroyed on the battlefield," Nilsson emphasized.

Problems are already affecting the military-industrial complex. With the exception of drone production, it remains unprofitable, dependent on state loans, and prone to corruption, according to Swedish intelligence.

As a result, Nilsson claims, Russia is "living on borrowed time" and faces two scenarios — a prolonged decline or a financial shock. In both cases, it means moving towards a crisis.

The Russian Ministry of Economic Development also acknowledged that economic growth reserves are largely exhausted, and the situation has become more complex due to high rates, labor shortages, and budget constraints.

If not for the US and Israel operation in Iran, which sent oil prices soaring, Moscow would already be eating its last reserves.

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